Interim report January-September 2012

2012-10-25 07:00

Submitted for publication at 07.00 CET on 25 October 2012

(Tables included in attached PDF)

Third quarter 2012

  • Net sales amounted to SEK 2 628 million, compared with SEK 2 440 million in the previous quarter.
  • Operating profit totalled SEK 161 million, on a par with the previous quarter. Lower costs compensated for lower exchange rates for invoicing as a result of a stronger SEK.
  • Results for the quarter were charged with non-recurring acquisition-related costs of SEK 16 million. Adjusted to reflect these non-recurring costs, operating profit totalled SEK 177 million.
  • Prices in local currency for packaging paper improved on average by about 2% compared with previous quarter due to implementation of earlier announced price increases.

January-September 2012 compared with the same period in 2011

  • Net sales amounted to SEK 7 359 million, a rise of 1%.
  • Operating profit fell to SEK 464 million, mainly as a result of lower prices.
  • Non-recurring acquisition-related costs totalled SEK 68 million (0).
  • The extraordinary general meeting approved the acquisition of Korsnäs and authorised the Board to carry out the share issues relating to the acquisition. A new Board was elected, to take office at completion of the acquisition.

Outlook

  • The order situation in the packaging paper segments at the beginning of the fourth quarter of 2012 was on average normal for the season and is expected to remain so in the majority of the product segments for the rest of 2012.
  • The impact of price increases for primary fibre-based containerboard, announced in the third quarter of 2012, is expected to show through during the fourth quarter of 2012.
  • Additional non-recurring transaction costs are estimated to add up to approximatelySEK 45 million, the major share of which is expected to be charged in the quarter in which the combination with Korsnäs is carried out. In addition to these costs, non-recurring financing and integration costs related to the combination with Korsnäs will also incur after completion of the transaction.
  • Wood cost in 2012 is anticipated to be approximately 6% lower than in 2011.

Comments by Billerud’s CEO Per Lindberg:
Stable earnings

“The year’s third quarter shows continued stability of order bookings, net sales of SEK 2 628 million and an operating profit of SEK 161 million. I am fairly satisfied with this result, as it takes into account two maintenance shutdowns and the impact of a stronger Swedish krona. During the quarter we announced price increases for containerboard. Price increases announced earlier for kraft and sack paper show through in third quarter earnings, although at a level somewhat below expectations. This was a factor in a 2% price increase for packaging paper during the quarter.

The contribution of our Finnish production units to the business is developing according to plan and benefits from the acquisition are shown. In the course of the next quarter, our short-term service agreement with UPM expires. We will then operate independently in order processing, IT systems and operations. This will create better opportunities to obtain synergies from the acquisition. Because the Finnish acquisition sharply reduces our exposure to the market pulp market, we will no longer report our sales of market pulp separately. Instead, as of this quarter, this business will form part of the Packaging & Speciality Paper business area.

Work on preparations to complete the combination with Korsnäs and plan for integration of the companies is in full swing. We await decisions from the competition authorities concerned in mid-November. The combination is still assessed to take place during the fourth quarter of 2012.

Against that background, we are looking forward to a fourth quarter in which we can launch the next phase in the company’s expansion, with new and exciting opportunities for BillerudKorsnäs. Despite increasing signals of a challenging economic scenario and a currently tougher currency situation, I face the future full of confidence.”

  
Billerud’s President and CEO Per Lindberg and CFO Susanne Lithander will present the interim report at a press and analyst conference at 10.00 CET on Thursday, 25 October.
Venue: Tändstickspalatset, Västra Trädgårdsgatan 15, Stockholm.

For further information in connection with this report, please contact Per Lindberg, President and CEO, +46 702 481 517 and Susanne Lithander, CFO, +46 730 370 874.

This information is such that Billerud AB (publ) is required to disclose under the Securities Market Act. Submitted for publication at 07.00 CET on 25 October 2012. This report has been prepared in both a Swedish and an English version. In the event of variations between the two, the Swedish version shall take precedence.

Billerud – “The Natural Part in Smarter Packaging”. Packaging manufacturers and brand owners are offered added value in the form of brand-strengthening, productivity-boosting and environment-enhancing packaging solutions. Billerud has a world-leading market position within primary fibre-based packaging paper. Billerud has annual sales of around SEK 11 000 million and is listed on NASDAQ OMX Stockholm. www.billerud.com

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Last updated: 2012-10-25